Elon Musk and Tesla Violated US Federal Labour Law, Judge Rules

Tesla is likely to appeal the decision.

By Faiz Siddiqui, The Washington Post | Updated: 28 September 2019 11:09 IST

Elon Musk and Tesla Violated US Federal Labour Law, Judge Rules

Tesla reportedly told employees that it would be "futile" to unionise

Highlights

Tesla's actions have been classified as "unfair labor practices"
The company is said to have unfairly disciplined employees
Tesla has been asked to re-hire an employee it fired recently

A judge ruled Friday that Tesla and its chief executive, Elon Musk, broke federal labor law by targeting union activity, the latest in a series of stinging rebukes to the electronic vehicle company.

The violations included a 2018 tweet from Musk's personal account that said nothing was stopping employees from voting, "but why pay union dues & give up stock options for nothing? Our safety record is 2X better than when plant was UAW & everybody already gets healthcare."

Tesla also introduced rules requiring permission for the distribution of union pamphlets and other materials in addition to threatening the loss of stock options if unionization occurred. The company also told employees that it would be "futile" to unionize because they would lack a voice, according to the ruling.

Those constituted "unfair labor practices" under the National Labor Relations Act, ruled administrative law judge Amita Baman Tracy.

It's not the first time Musk has gotten in trouble for his tweets. Last year, he ended up in a dispute with the Securities and Exchange Commission over a tweet by Musk saying he had "funding secured" to take the company private. Musk was removed as chairman of the company's board, and he and the company were each fined $20 million (roughly Rs. 141.35 crores) in a settlement of the charges. He is also now limited in what he's allowed to post on social media.

Federal safety regulators also accused Musk of issuing "misleading statements" on his company's Tesla Model 3 last year, sending a cease-and-desist letter after the chief executive claimed it was safer than other vehicles.

Tesla did not immediately respond to a request for comment on the Friday ruling.

Tesla also unfairly disciplined employees who were seen as engaging in activity to advance a union, according to the ruling. Tesla must offer a fired employee his job back and remove disciplinary records for him and another worker who was warned in connection with his union activity, according to the ruling, which was first reported by Bloomberg.

Tracy cited more than 10 actions committed by Tesla and Musk that violated provisions of the Labor Relations Act and ordered remedies including backpay and reemployment for a the fired worker, the rescinding of rules that targeted union activity and a meeting at Tesla's Fremont plant where the company must give workers detailed notice of the labor violations.

Musk must be present for any such meeting, the judge ruled.

Tesla is likely to appeal the decision, which was brought in response to a suit filed by affected workers and the United Auto Workers union.

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